A hilarious 2001 Wall Street research note praised Enron's 'revolutionary' business model 9 months before it started to collapse

Cast
member Gregory Itzin, depicting former Enron CEO Kenneth Lay,
performs during a dress rehearsal of the playREUTERS/Lucas Jackson

Today, Enron's name has become a byword for accounting fraud and
corruption, but obviously that wasn't always the case. Before it
collapsed, it was known for being a cutting-edge innovator in
pretty much any sector it turned its mind to.

And so there's some pretty cringe-worthy commentary about the
company circulating, dating back to before it fell apart. But a
note posted on Wall
Street Oasis on Enron, written in January 2001, is
perhaps the most breathtaking.

It was written by researchers at Bear Stearns, which itself went
under in 2008 and was acquired by JP Morgan.

One of the opening paragraphs gives the tone of the piece, with
sets a $98 share price target for the company, up from $76 at the
time it was written:

Already an established leader in the natural gas industry, Enron
is moving rapidly — through revolutionary communications systems
and interfaces — to become the world’s preeminent energy and
commodities marketer, high-density Internet distributor, and
distributed energy leader. We believe that Enron should be
compared to leading global companies like GE, Citigroup, Nokia,
Microsoft, and Intel, and that its valuation reflects this
eminence.

The rest of the note isn't much better.

The Bear Sterns price target must have seemed for a while to be
too pessimistic. By August, the price had surged to above $90 per
share. At the same time, whistleblower Sherron Watkins
sent a message to Enron's CEO warning that the company could
"implode in a wave of accounting scandals."

By October, the company was reporting massive losses, and
by December it had filed for what was then the biggest bankruptcy
in American history.

The note is actually a little difficult to read. It refers to a
"virtually unlimited" market for Enron's retail energy services,
noting that Fortune magazine named it one of "America’s Most
Innovative Companies" five years in a row.

The earnings figures expected for both 2001 and 2002 turned out
to be a little rosy, too:

Enron is currently seeking to monetize several billion dollars
worth of assets over the next year, including sizable past
investments in its international portfolio. While we applaud
these steps, sales of certain assets could prove more difficult
in the current global economic environment.